The Executive has agreed to increase the regional rate for domestic properties by 5.0% for the 2026/27 financial year, matching the previous year’s uplift and adding approximately 63p per week to average household bills. The decision, announced by the Department of Finance on 12 February 2026, sets the regional rate component of bills that will be issued to homes and businesses across Northern Ireland from April.
Non-domestic properties will see a smaller increase of 3.0%, set deliberately below the current inflation rate to ease pressure on businesses. The regional rate contributes to overall bills alongside district rates set by individual councils, which remain to be finalised for the coming year. The Assembly will debate the increases in March before they take effect.
Revenue raised and public services
The regional rate is expected to raise just over £900 million for the Executive in 2026/27, contributing to a total rates pot exceeding £1.6 billion annually when combined with district rates. However, not all of this revenue will be available for public services.
- Total regional rate revenue: £900 million
- RRI principal repayments: £130.5 million (first call on revenue)
- Available for wider public services: £770 million
- Additional funding power generated: £47 million compared to Budget 2025-26
- Inflation context: 3.4% CPI (December 2025)
Finance Minister John O’Dowd said the Executive faced difficult choices in setting the rates. A written ministerial statement provides further technical details.
Minister defends “balanced approach”
John O’Dowd outlined the rationale behind maintaining the 5% domestic increase while keeping business rises lower:
“Rates currently raise over £1.6billion annually providing vital funding for our hospitals, childcare, schools, and other essential council services that support our communities. The regional rate agreed today will raise just over £900million for the Executive for the 2026/27 year.
“With many households still feeling the pressure of rising living costs, and businesses facing increased costs, the Executive has aimed to strike a balance between raising the revenue required to support essential public services and protecting workers, families and businesses from unnecessary financial strain.”
“The Executive’s decision to keep the domestic uplift at the same level as last year is a recognition of the cost of living pressures felt by households. Keeping the non-domestic rate below the current rate of inflation reflects the pressures facing local businesses and their vital role in supporting jobs in our local communities and driving local growth.
“Domestic ratepayers have access to a targeted, means‑tested package of help that serves to provide support for low-income households. 75% of non‑domestic properties benefit from rate relief, offering around a quarter of a billion pounds in much‑needed support.”
“These uplifts, to be debated in the Assembly in March, would generate an additional £47million of funding power during 2026/27, compared to Budget 2025-26, for our vital public services that our citizens and businesses rely on.”
Support schemes and reliefs
The Department emphasised that support mechanisms remain in place to cushion the impact. Around three-quarters of non-domestic properties currently receive some form of rate relief, worth approximately £250 million annually. The small business rate relief scheme provides discounts of 20% to 50% for eligible businesses.
For domestic ratepayers, means-tested support is available for low-income households. The average capital value of a domestic property in the valuation list stands at £123,000, though this is based on 2005 valuations rather than current market values.
Missing pieces and broader pressures
Several important details remain unresolved and will determine the final size of rates bills issued in April:
- District rates: The 11 councils set their own district rates independently, and these have not yet been finalised for 2026/27. Last year, increases ranged from 3.65% to 5.99%, with Belfast City Council agreeing a 5.99% rise.
- Cumulative impact: This marks the second consecutive year of 5% increases for domestic properties, compounding pressures on households already managing higher energy and food costs.
- Reval 2026: While the regional rate poundage for businesses is capped at 3%, the ongoing Reval 2026 process has increased property valuations across sectors by an average of 15%, with some hospitality businesses facing valuation jumps of up to 84%. Rate bills are calculated by multiplying the valuation by the poundage, meaning some businesses could still see significant bill increases despite the 3% cap on the rate itself.
- Budget constraints: The £47 million additional funding generated comes amid warnings from the NI Fiscal Council about “unprecedented low budget increases” facing Northern Ireland over the next three years.
Questions for policymakers
- With district rates yet to be set, how many households will face combined regional and district increases that exceed the current 3.4% inflation rate?
- Will the 3% cap on non-domestic regional rates be sufficient to offset the impact of Reval 2026 on hospitality and retail businesses facing double-digit valuation increases?
- How will the Executive ensure the £250 million in business rate relief is targeted effectively while addressing concerns about vacant properties in town centres?
- Is a 5% annual increase sustainable for households if wage growth slows or inflation remains sticky?
- Given the £130.5 million RRI repayment obligation, should the Executive explore alternative revenue streams to reduce reliance on property-based taxation?
The Assembly will debate the rates order in March 2026. Ratepayers will receive their final bills once councils confirm their respective district rates, with payment due from April. The coming months will reveal whether the Executive’s “balanced approach” successfully protects vulnerable households and struggling businesses while generating the revenue needed to sustain public services.